Ranch priced at $1,2xx/ac, $1,4xx/ac, or $1,8xx/ac, but the number of ranch listings priced below $2,xxx/ac or more was declining. Eventually they were gone, totally gone, and I cannot recall when I last saw 4-digit acreage pricing in Gillespie County that began with a “1,xxx.” Last year I saw a similar phenomenon regarding housing prices in Fredericksburg under $200,000. I noticed there were fewer and fewer homes priced less than $200,000, that is, the number of houses priced at $199,999 or less was getting much smaller. I predict we will still see a few sub-$200k list prices during the remainder of 2016, but not many.* There may be some days when we do not have any homes priced less than $200,000. When I checked this morning there were still 2 active listings under $200,000. Earlier in the week there was one or two days where we had only 1 house priced under $200,000. The question is how much longer will it be possible to purchase a home in Fredericksburg under $200,000? What causes this? Part of the answer is “supply and demand.” Part of the answer is in high land prices. Part of the answer is in high development costs to establish a subdivision (impact fees, sewer and water tap fees, engineering fees, mandatory detention or retention ponds, mandatory sidewalks, curb and gutter costs, etc.).
There were 45 homes sold in Fredericksburg below $200,000 last year (2/20/15 vs. 2/20/16). There are currently 2 Active houses listed below $200,000.** How fast will they sell? At the rate of sales of 3.75sales / month (45 sales / 12 mos), if they sell at the current pace of other sub-$200,000 sales, these 2 will go in about 16 days. In the meantime, others may become available, but don’t count on it. Like the dinosaurs and the ice age, like the sub-$1,000/ac ranch, the sub-$200,000 home is going away.
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*Unless there is a dramatic downturn in the economy or a new affordable home subdivision developed.
**As of 2/20/2016